the XAU/USD made a strong bullish breakout but price is now approaching a hefty and heavy resistance zone which could send price back down again.
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The XAU/USD wave pattern is suggesting a bearish bounce at the resistance levels for one more push lower. The bearish swing could expand and complete the wave E (pink) of a larger triangle pattern. However, if price manages to break above the top of wave D (pink), then the larger bearish correction is invalidated and an immediate uptrend continuation seems imminent.
The XAU/USD strong impulsive price swing is probably a wave 3 (green) pattern, which seems to be part of larger bullish ABC (blue) zigzag. A pullback is expected to bounce at the Fibonacci retracement levels of wave 4 vs 3 and move up for one more higher high to complete wave 5. However, a break below the 50% Fibonacci retracement level would make this wave outlook less likely.
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